Apple IPhone 4 Press Conference : July 16, 2010Emergency Press Conference
12:42 - Waiting for the event to begin; it's at Apple's campus, which reflects the sudden nature of the press conference.
12:51 - People are entering the presentation room.
12:57 - Things are going slowly; it's not uncustomary for Apple (and many others) to be late in getting a presentation started.
1:02 - People are all seated, but Apple has yet to start.
1:04 - Apple is starting.
1:06 - Playing a YouTube video making fun of the iPhone antenna problems. "In terms of daily usage, I've yet to drop a call," one line goes.
1:07 - The video in question isn't made by Apple: http://www.youtube.com/watch?v=VKIcaejkpD4
1:07 - Jobs on stage: We saw that on YouTube and wanted to share it. Pres will be short: 15 minutes, then Q&A.
1:08 - Jobs: We're not perfect; phones aren't perfect. We know that, you know that. But we want to make all our users happy. If you don't know that, you don’t know Apple. We’re going to talk about how we’re going to do that.
1:09 - Going to talk about problems and the data we've got. iPhone 4 is perhaps the best product ever made at Apple; sold over 3 million phones since going on sale 3 weeks ago. Judged #1 by a variety of pubs. People seem to like it, users seem to love it.
1:10 - Highest customer satisfaction rating of any iPhone or smartphone. We did get reports about issues with the antenna system; people see al arge drop in bars, and this has been dubbed "antennagate." [rare acknowledgement here]
1:11 - 22 days since launch; Apple is engineering-driven. The way we work, we want to know the real problem before we make a solution. Wanted to find out what the real issues are, and we want to share what we've learned. Let's go to data.
1:12 - One of the first things we learned: it's not unique to the iPhone. We did our own testing. Example of other smartphones: the BlackBerry Bold 9700 drops from 4-5 bars to one, identical to the iPhone 4.
1:12 - Bold's grip is a populary way to hold it. Next: HTC Droid Eris. Also drops from four bars to none.
1:15 - Samsung Omnia II: four bars to start. None of this is standardized, by the way. Manufacturers come up with their own ways to show bars. A tight hold brings the Omnia 2 from five to one. "We could have gone on and on," Jobs says, but "most smartphones behave exactly the same way."
1:15 - Challenge for the whole industry, and we're doing the best we can. Every phone has weak spots. We're not perfect; we made it very visible.
1:17 - X marks the spot: you know exactly where to hold it (to make the signal drop). We screwed up on our algorithm. All smartphones seem to do this; we haven't figured out our way around the laws of physics, yet.
1:18 - We have an extremely sophisticated antenna lab. 17 anechoic (sound-deadening) chambers, over $100 million in antenna testing facilities over the last 5 years, 18 scientists/engineers doing some very advanced antenna design.
1:20 - Knew that if you gripped the phone in a certain way the bars would go down, like everyone else. Challenge to the entire industry, hoping to make some contributions in coming years.
1:21 - Better reception from our antenna than we've ever seen before. What have we learned? Smartphones have weak spots. If you read all these articles, you might think half our customers have complaints. Percent actually calling Apple? 0.55 percent. Historically, not a large number.
1:22 - On return rates: AT&T is the largest reseller of iPhones in the world; it has a "buyer's remorse" period where you can return the phone, no questions asked. Its return rates? We'll compare to the iPhone 3GS, which was the best selling smartphone in history [not sure if that's true].
1:23 - iPhone 3GS' return rate was 6 percent; iPhone 4's is 2 percent. That's one third of the return rate. Pretty interesting. One more data point: AT&T has given us the early call drop rate just a couple of days ago. They log call drops, it helps improve the network.
1:25 - AT&T won't give out absolute data for competitive reasons, but they'll release the difference. How do they compare to the 3GS per 100 calls? The data says the iPhone 4 drops more calls than the 3GS. But by how many more? Listening to "antennagate," it must be dropping many more calls! But it drops less than 1 call per 100 than the 3GS.
1:27 - Jobs has a pet theory: when the 3GS, there was already a healthy market for cases that fit. But in our store, 80 percent of iPhone 4s walk out without a case. But again, zooming out, there's less than one drop per hundred calls.
1:28 - Reviewing points from before. Jobs clearly trying to minimize the significance of the problem before offering a fix.
1:29 - When our engineers and scientists look at this data, it's hard to escape the conclusion that there is a problem, but that it's affecting a very small percentage of our users. I myself have gotten over 5,000 e-mails from users telling me their iPhone works fine, and they can't figure out what this [problem] is about.
1:30 - Having said this, we care about every user. And we won't stop until everyone is happy. It's important to understand the scope of the issue. The data says the issue has been blown so far out of proportion, it's incredible. It's fun to have a stoyr, but it's less fun to be on the other end of it.
1:30 - So here's what we're going to do: yesterday we released iOS 4.0.1 that fixes some of the bugs with the algorithm. We recommend everyone update to it.
1:31 - Second: a lot of people have said the bumper solves the signal strength problem. Great. Let's give everyone a case: everyone is going to get a free case. One for every iPhone 4. If you bought one, we'll give you a refund, and we'll keep the offer running through September 30.
1:32 - We can't make enough bumpers, so what we're going to do is source some other cases; you'll pick a case, and we'll send it off to you. And if you're still not happy even after getting a case, you can bring your iPhone 4 back undamaged for a full refund. We're going to take care of everyone. We want every user to be happy. And if we can't make them happy, we'll give them a full refund.
1:33 - Some other updates: we're tracking problems with the proximity sensor, and we'll have that [fix] in the next update. On the white iPhone: lots are waiting for it, and they'll ship at the end of July in limited quantities.
1:34 - On July 30, we're going to bring the iPhone to 17 more countries; same as announced before [including Canada].
1:35 - In ending, I'd like to give you a feel of what we care about, how we operate, and how we make decisions. We love our users. We try very hard to surprise and delight them. We work our asses off. It's great, and we have a blast doing it. We make some pretty interesting products for them -- Macs, iPhones, iPads, iPods, the Apple TV -- we make some pretty great products.
1:36 - Love our users so much we've built 300 Apple retail stores for them; best buying experience in the world, and the best ownership experience in the world. Genius Bars cost nothing to bring your products in and get advice. We had over 60 million people through our stores last quarter.
1:36 - We do all this because we love our users. When we fall short, which we do sometimes, we try harder. We pick ourselves up, we figure out what's wrong, and we try harder. When we succeed, they reward us by staying our users, and that makes it all worth it.
1:38 - When we have problems like this and people criticize us, we take it really peronally. Maybe we should have a wall of PR people to insulate us, but we don't [not entirely true]. When our users have a problem, we have a problem. We've been working really hard over the last 22 days to figure out the problem, to solve the real problem. We think we've gotten to the heart of the problem, and that is smartphones have weak spots. Some took advantage by demonstrating that, and it was easily demonstrable, but for those small number of customers having problems, we're going to give them free cases or a full refund.
1:39 - Data still supports that the iPhone 4 is the best smartphone in the world, and there is no "antennagate," but there is a challenge to the entire industry. Today, we love our customers and we're going to take care of them.
1:39 - Q&A: Jobs, Tim Cook and Bob Mansfield up on stage.
1:40 - Steve on his health: I'm fine! Was on vacation in Hawaii, but this was important enough to come back for.
1:41 - Any changes for future antenna designs? We're still working on this. We're happy with the design; we're getting a lot of reports from customers that it's way better than [on] the 3GS. I don't know what our next antenna design will be. Maybe our wizards in the antenna lab will come up with something better. But looking at data, we don't think we have a problem.
1:46 - How does touching the corner with a single finger cause the issue? Your body is a pretty effective signal absorber. When you make contact, its performance is less than its free space performance. [didn't really answer the question as to why it's so sensitive]
1:48 - Did anyone warn you about it? Jobs assumes he's referring to the Bloomberg article about advance knowledge. "Yeah, it's a crock. what's portrayed in that article never came across my consciousness, and I talked to Reuben [Caballero] and he agrees it's total bull**** [yes, Jobs said this].
1:49 - Investors want you to make an apology; would you be willing to do that? To our customers who are affected by the issue, we are deeply sorry, and we're going to give you a free case or a full refund. We want investors who invest in Apple for the long haul, because they believe in us. To those who bought stock and are down $5, I have no apology; if we hit a bump in the road, it's like having kids [it happens].
1:50 - Do Apple customers have to choose between form and function? No, Jobs says. Retina Display is being widely hailed as the best display ever created. We try to have our cake and eat it too. We try to have great design and great performance. If you look at our products, that's what we deliver. [again, something of a non-answer]
1:52 - Is there anything you could have said in the keynote to lower expectations for reception? Jobs has thought about that a lot. We didn't fully understand if there were problems at that point. We might have set expectations that smartphones have weak spots, but most smartphones have the same characteristic as the iPhone 4. If you grip them in a certain way, they lose signal strength dramatically, especially in a low signal strength area. One of the things we've learned is that, as a leader in the smartphone world, we need to educate. So what we needed was data. Now we've got some, and we're sharing it.
1:55 - Jobs goes on: you could make a really big smartphone that doesn't have this problem; some of these guys are making Hummers now [referring to Hummer's sale to a Chinese company]. It'd be so big you can't get your hand around it. But no one's going to buy that. But the press around this, maybe it's because people thought we were perfect, and they saw somewhere we aren't, and they jumped on it. I can tell you, we're a band of people. We aren't perfect, and we're working our asses off.
1:56 - Why Sept 30 cutoff? Do you expect people to buy cases later? It's so we can reevaluate this in September. I have no idea what solutions may come up [rumors are of a hardware fix].
1:57 - If you bought a third-party case, will you get a refund? No; it's a very small number, because we didn't share the phone design with case manufacturers in advance of launch. But now we wish there were more cases out there! It's really simple why: when people find out about your new product, they stop buying your old products. Sometimes websites buy stolen prototypes and put them on the web, and we don't care for that. But if we give designs to case makers, they have a history of putting them up on the web as well. [this is very much true]
1:58 - Case vendors haven't had a history of helping us through that. It's a conundrum. We'll consider things on a case by case basis [deliberate pun].
1:59 - Do you carry your iPhone 4s with the bumper? Cook, Jobs and Mansfield all show bare iPhone 4s. Jobs uses it in his home, and he lives in a brick house. I've gotten reception where I haven't gotten it before, I'm thrilled. That doesn't mean other people don't have problems, but that's been my experience.
2:01 - What has Apple learned? We did learn some things. One is how much we love our customers and how we're going to take care of them. We were stunned, and upset, and embarrassed by the Consumer Reports stuff, and the reason we didn't say more is because we didn't know enough. If we'd done this event a week and a half ago, we wouldn't have had half the data we do today.
2:02 - We're an engineering company, we think like engineers, and we think it's the right way to solve real, hard problems. I don't thin ktaht we love our customers is going to change at all. Don't think we could run any faster. We've had cots in the labs, cars in the parking lots all night, we've been living here.
2:03 - It's just human nature: when you see someone successful you just want to tear it down. I see it happening with Google. Google is a great company. Look at everything they've created. Would you prefer we're Korean companies? Do you not like the fact that we're an American company leading the world right here? Of course we're human, of course we'll make mistakes. Sometimes I feel that in search of eyeballs for these websites, peopel don't care about what they leave in their wake.
2:13 - Apple has been around 30 years. Haven't we earned credibility and trust to take care of users? Weren't just innocents. Reaction has been so overblown.
2:14 - You can see pictures of a Nokia phone with a sticker on it that says “don’t touch here.” No one has solved this problem. Would I love Apple be the first? Can we make our situation better than it is right now? Maybe, we’ll see, but most of our customers are not experiencing this problem. In actual use, they never encounter it — just like any phone, certain customers will hold it in a way that exposes its weakness, and we want to get ‘em a case. We will continue to work on more advanced antenna designs that don’t have this problem or put this problem in an out of the way place.
2:17 - Did Apple consider a recall? Nothing is off the table, but we want to be data driven. We send engineers to people's homes with test equipment.
2:17 - Return rates? Extremely small at Apple, lower even than AT&T numbers.
2:19 - NYT says this may have a software fix. Something that can be helped? We just spent the past hour saying how iPhone 4 only drops one more call per 100 than the 3GS. Go talk to the NYT, because you guys talk to yourselves a lot, and they're just making this stuff up.
2:19 - Scott Forstall on stage: Statement is patently false. Can we continue to tune the way the baseband interacts? Yes, and we do this all the time. But that statement is untrue.
2:19 - What impact do you think it'll have? We'll talk about it for our Q2 results call next week.
2:21 - Used my iPhone on a heavily congested cell in San Francisco. I'd like to know if the handset has any role in congestion management. Does the stack play no role in congestion? Jobs says SF is much slower for upgrades: in Texas it takes 3 weeks, in SF on average it's 3 years. No one wants a cell tower in their backyard, but everyone wants perfect reception.
2:21 - AT&T is investing. They have to expand. We know, because we're constantly asking about the SF and Bay Area. It takes a long time, and that's the high order bit [talk] on congestion.
2:23 - Two years ago, Apple released a software fix that improved reception; can you square that with this? To understand Apple, an insight came about 8 years ago: we didn't want to get into any business that we didn't own and control the primary technology. If they [others] do, they're going to beat you in the end. You have to build on top of them. We didn't have to make the processors. Software is the most important component.
2:25 - iPod proved we could do that; but we brought the software to the phone business in a way we'd never seen before. One of the things we did was make the process of updating your software an order of magnitude easier than it was before. We can frictionlessly distribute those updates. Everybody’s copying Apple now, but we’re the first to do that in a practical way.
2:26 - On Jobs' e-mail habits: I get a lot of e-mail, and my address is out there. I can't reply to all of these e-mails. I have a day job. Some people post them on the web, which is kind of rude, but the most recent phenomena is people just making them up! But they're our customers, and I want to communicate with them.
2:27 - Jobs: thanks for coming! Has this helped? Wish we could have done this in the first 48 hours, but then you wouldn't have had so much to write about.
2:27 - Event ends.